'Genre channels' would threaten BBC's licence fee

The BBC should be prepared to lose the licence fee if it goes ahead with a radical plan to transform BBC1 and BBC2 by turning them into "genre-based channels", MPs said yesterday.

The BBC should be prepared to lose the licence fee if it goes ahead with a radical plan to transform BBC1 and BBC2 by turning them into "genre-based channels", MPs said yesterday.

The corporation would like to put entertainment and popular programmes on BBC1 and more serious output on BBC2, but the Culture, Media and Sport Select Committee said that would change the nature of the BBC entirely.

"If BBC1 were to become ITV without the commercials and BBC2 were to become Channel 4 without the controversy, then this would affect the justification for the BBC as at present constituted and funded," it said in a hostile report on the BBC's accounts.

The committee appeared angry at the fact that the proposals, which would end mixed schedules, were recently aired by the corporation's director of television, Mark Thompson, with little apparent regard for whether they went beyond the BBC's remit. The MPs' report said: "A generalised offer by Sir Christopher Bland [the BBC's chairman] for 'public debate and discussion' is simply not good enough. While the BBC remains a state corporation funded by a hypothecated tax, it has public service obligations that it must continue to meet in full."

The committee was scath-ing of the way the BBC was regulated by Sir Christopher and the board of governors, saying the system should be scrapped. The MPs were concerned that "the views and roles of management and of the governors appear indistinguishable. In future it must be for the BBC's managers to manage the BBC and for an independent regulator to regulate the BBC."

The Government is consulting on whether the governors should be abolished. A Communications White Paper will be issued later this year.

The committee criticised the corporation for being oversecretive, saying: "We have found our efforts to hold the BBC to account through the scrutiny of the annual report and accounts akin to trying to grasp an eel ... [The report and accounts'] contents are often inadequate and sometimes disingenous. The oral evidence from BBC witnesses was too often incomplete and evasive."

One example of the lack of transparency in the BBC's accounts is the way it refuses to give audience figures for its £50m News 24 channel, and instead combines the figures with audiences who see the service on BBC1 and 2. It described the conflation of the two sets of figures as "misguided and misleading", and said that, in future, BBC annual reports should distinguish between the two. The MPs' report said: "When we raised this point with Sir Christopher Bland, he suggested it was 'a semantic matter'. We disagree."

The committee reiterated its earlier view that the BBC should open its books to the National Audit Office, a proposal put forward by the Davies Committee on Funding of the BBC last year, but rejected by the Secretary of State for Culture, Media and Sport, Chris Smith.

Mr Smith's department, however, has no intention of reviewing the decision, insiders confirmed yesterday, saying that instead they were awaiting the report of an independent firm of accountants that is currently inspecting the BBC's books. Their report will be given to the Culture select committee later this year

The BBC responded to the committee's warning about genre-based channels, saying: "There are no firm proposals to change either channel. You would expect the BBC to examine the impact of new technology on the services to ensure they serve all parts of the nation and keep their place at the heart of the nation's life."